Turkey has a long history of textile manufacturing, that dates back to the Ottoman Empire. It remains one of the world\u2019s most important countries in the global textile and apparel industry.<\/p>\n
Turkey is an attractive location for the manufacturing of apparel and textile goods. It sits at an important juncture between Europe and Asia, straddling political, economic, and geographic lines. Not even 2,200km from Istanbul to Berlin, Turkey\u2019s proximity to the European Union (EU), and membership in the EU customs union serve as one of its most appealing attributes.<\/p>\n
Playing a significant role in world trade with the capability to meet high standards and can compete in international markets in terms of high quality and a broad range of products.<\/p>\n
Boasting an official workforce of roughly one million, nearly 53,000 factories produce tens of billions of dollars\u2019 worth of apparel and textile goods every year.<\/p>\n
Textiles and apparel are Turkeys\u2019 2nd<\/sup>\u00a0most successful export product, which earned 9.4% of the country\u2019s total exports, of them knitwear amounted to US$ 8.8bn (5.6% of total export), while exports of woven clothing reached US$6.0bn (3.8% of the total) in 2017.<\/p>\n In 2017, the country ranked as the fifth largest exporter of textiles worldwide, accounting for almost four percent of all exports. The industry is also still showing signs of growth, with the value of both textiles and clothing exported having more than doubled since 2000.<\/p>\n A large proportion of the textile and apparel goods leaving Turkey to arrive in locations inside Europe, with Germany, the United Kingdom, Spain, and Italy ranking as the top four destinations. In 2016, these four countries together accounted for over 10 billion dollars\u2019 worth of exports.<\/p>\n For Turkey\u2019s top players, textile and apparel production is clearly a profitable business. Overall, there are around twenty thousand\u00a0textile manufacturers\u00a0and fifty-two thousand\u00a0apparel manufacturers\u00a0in Turkey, which generate an annual turnover of around\u00a030 billion euros\u00a0and\u00a022 billion euros\u00a0respectively.<\/p>\n The European Union is the main market for Turkey\u2019s textile and apparel, with 72% of the exports headed to these regions.<\/p>\n Though Turkey commands a sizeable and skilled workforce, the cost of labor compared to other manufacturing hotspots is high at about $550 per month. Turkey struggles to compete with low\u00a0monthly wages\u00a0in nations such as Bangladesh ($65), China ($150-$275), Pakistan ($100), and Vietnam ($114-$166). This is a key factor for such a labor-intensive industry, where it has been calculated that labor can account for up to\u00a030% of costs.<\/p>\n The Turkish lira has lost over 50 percent of its value against the dollar since July 2016 and devalued by 17 percent in May 2018 alone.<\/p>\n \u201cThe Turkish market is still growing, not just in the cities like Istanbul and Izmir, but all over the country,\u201d said Mavi Jeans chief executive Cuneyt Yavuz. \u201cEastern Turkey has a particularly young population,\u201d with greater purchasing power that brands are starting to tap into.<\/p>\n Meanwhile, seven cities outside of Istanbul, including Konya and Mersin, are home to four-fifths of affluent households (those with incomes greater than $75,000) meaning \u201ca greater share of spending will happen outside of Istanbul [than before],\u201d states a McKinsey report.<\/p>\n The Turkish government aims to provide more assistance to its domestic producers by coming up with programs like the Turquality program. It is specifically created to make domestic producers become more competitive.<\/p>\n Despite foreign direct investment (FDI) falling by 18.8 percent to $10.83 billion in 2017 with departures from retailers including Topshop, Printemps, and C&A, capital inflow from EU countries rose by almost 30 percent year-on-year. Brands from All Saints to Armani Exchange have also renewed their\u00a0commitment to the market.<\/p>\n While Chinese foreign direct investment (FDI) in Turkey exceeded US$ 2 billion according to the data of the Economy Ministry for the last 15 year, the largest FDI from China was the acquisition of Turkey\u2019s third-largest port, Kumport, in Istanbul by the Chinese giant container terminal operator Cosco Pacific for US$ 940 million in September 2015.<\/p>\n As a major trading partner and textiles producer Turkey cannot be ignored, nor should it. Companies must be smart when doing business in Turkey, especially as it seeks to spur economic growth. Even as its proximity and workforce size and skill prove to be attractive incentives, risk factors remain that must be addressed for both business and ethical reasons.<\/p>\n","protected":false},"excerpt":{"rendered":" Turkey has a long history of textile manufacturing, that dates back to the Ottoman Empire. It remains one of the world\u2019s most important countries in the global textile and apparel industry. Turkey is an attractive location for the manufacturing of apparel and textile goods. It sits at an important juncture between Europe and Asia, straddling […]<\/p>\n","protected":false},"author":3,"featured_media":215,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[116,117,118,42,122,119,120,121],"class_list":["post-214","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-european-union-turkey","tag-fdi-turkey","tag-fifth-largest-exporter","tag-textile","tag-turkey","tag-turkey-apparel","tag-turkey-manufacturing","tag-turkey-textiles"],"yoast_head":"\nOpportunities and Challenges<\/h3>\n
Foreign Direct Investment (FDI)<\/h3>\n
Conclusion<\/h3>\n